...T-Bills yield settles at 22.10%
SAT APRIL 27 2024-theGBJournal|The Treasury bonds secondary market closed on a bullish note this week, driven by demand for short and mid tenured instruments. Consequently, the average yield declined by 11bps to 18.9%.
Across the benchmark curve, the average yield contracted at the short (-12bps), mid (-15bps) and long (-7bps) segments due to buying interest in the JAN-2026 (-67bps), JUN-2033 (-27bps) and JUN-2038 (-76bps) bonds, respectively.
Analysts at Cordros Research say they expect sustenance of demand for short-dated instruments in the Treasury bonds secondary market as the weak liquidity and macroeconomic profile continue to drive trading pattern in the coming weeks.
”Over the medium term, we expect yields to remain elevated, driven by the anticipated monetary policy administration globally and domestically and sustained imbalance in the demand and supply dynamics, Cordros said.”
Similarly, the FGN Eurobond market witnessed buying activities initially as the Israel-Iran war tensions eased and investors considered current levels as attractive.
Despite the S&P Global Manufacturing and Services PMI printing at 49.9 and 50.9, respectively, below expectations of 52, bearish sentiments trickled into the FGN Eurobond market.
The bearish trend was sustained in the FGN Eurobond market as market participants implored a cautious ahead of the due macroeconomic data.
The Core PCE index QoQ printed at 3.7% above expectations of 3.4% and a previous of 2%. In addition, the United States economy’s growth slowed sharply last quarter to 1.6%, reflecting the pressure of high rates while the PCE index excluding food and energy increased 2.8%, above the 2.7% estimate from the Dow Jones consensus.
Furthermore, the average benchmark yields rose 3bps week-on-week, settling at 9.80%.
Meanwhile, the Treasury Bills market traded on an active note this week with demand skewed to the April bills.
At the PMA, the DMO offered N142.57 billion across the standard maturities. However, N362.45 billion was sold while total subscription stood at N757.86 billion.
Stop rates remained unchanged across all tenors at 16.24%, 17.00%, and 20.70%, respectively.
As the week progressed, we saw trades executed on the 10-Apr-2025 and newly issued 24-Apr-2025 bill at 20.10%. Week-on-week analysis indicates a 298bps decline in the average benchmark yield, printing at 22.10%.
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